When the scope of a project is beyond your skill set, it's normal to seek outside help. Relying on a general contractor to manage a home renovation takes a lot of stress off your shoulders and ensures a more successful timeline.
However, projects requiring a contractor's help typically have a hefty price tag. Their expensive nature makes these jobs a prime target for scammers who want to exploit unsuspecting people.
What is a Contractor Scam?
In a contractor scam, the person hired to complete a
home Improvement has no intention of completing the job. In many cases, the scammer takes the deposit and runs without so much as measuring a room.
A potentially worse outcome is the scammer who actively damages your home in addition to taking your money. These fake contractors actually work on your home but are unskilled and overcharge for their services. They complete the work poorly and
leave you worse off than before.
Signs of a Contractor Scam
Anyone running a contractor scam wants to convince you quickly that you need their services. They also want to prevent you from asking too many questions and uncovering their many lies.
These goals mean there are common patterns shared by most scams, including:
- They Find You: Scammers will pop up at your door and try to sell you their business. They control the narrative, and it's less likely that you will notice their low reputation or lack of online presence.
- They Want Payment Upfront: These criminals will ask for a big deposit before lifting a finger. They justify their higher price for charitable reasons, like using materials from a prior project.
- They Want an Immediate Answer: Contractor scammers will pressure you for a decision on the spot once they're finished with their pitch. They don't want you taking your time to verify their claims or do your due diligence.
- They Recommend Places to Borrow: Renovations are expensive. Scammers sometimes have connections with third-party money lenders and push you in their direction as part of a deceitful marketing pipeline.
What Are "Storm Chasers?"
Storm chasers are a rather nefarious form of contractor scammer. They follow storms moving across the country and approach people whose homes were damaged by harsh weather, such as storms, hail, and tornados.
The bread-and-butter of a storm chaser's sales pitch is fear. They
convince homeowners that their roof is unstable and is a potential risk to their family. This puts a time-sensitive decision in the target's lap, making them more likely to fall for the ploy.
Alongside the typical signs of a contractor scam, storm chasers are typically out-of-state contractors. Even if they do not directly disclose that they are coming from another state, you can tell by their phone number's area code.
Essential Steps to Avoid Contractor Scams
Recognizing contractor scams protects your money, house, and family. There's a chance that your home genuinely needs repairs, and falling for a scam will greatly prolong the time it takes to right the ship.
So, here are some tips for avoiding the bad apples knocking on your door.
Do Your Research
Scam artists want to feed you plausible lies, but the truth will come out with a bit of research. You don't have to dig into every one of a contractor's associates, but it's essential to
verify contractor information in NJ before hiring.
They will try to trap you with a meager price or attempt to take credit for a job that had nothing to do with them. Get the contact information for any previous clients the contractor brings up. You can get an address to check out their work if you're lucky.
It would help if you also got quotes from other general contractors. Even if the first person is legitimate, you must know what others charge to get a fair price. Most general contractors will provide a free estimate unless they're significantly in demand. Using
a contractor that offers financing is a great way of combining the benefits of delayed payments with safer selection of a technician.
Most importantly, this step means stepping back from your first conversation with the contractor. If they turn out to be scam artists, they won't try to push the issue if you don't say yes right away.
Verify Credentials
Contractors don't just wake up one day and start working on people's houses. They must get a
general contractor license to prove their experience, coordination, and skills. This guarantees that the contractor can meet the strict codes and regulations the government creates.
The New Jersey Division of Property Management and Construction provides a tool to look up a contractor's certifications. You can get the necessary information from the contractor and should immediately decline their offer if they cannot provide it.
Get Everything in Writing
Verbal agreements aren't enough when working with a contractor. Written deals protect yourself and your investment, and insisting on a detailed contract won't scare off a real professional.
The details should
include the scope of work, material costs, project timeline, and payment schedule. Knowing how to deal with any failures or cost changes on the contractor's end will prevent them from manipulating you after the project begins.
A contract's most important job is to create clear expectations out of the relationship. Never proceed with any work or payment until a signed agreement is in hand.
A
lien waiver is one aspect of the written agreement that many people don't know about. General contractors connect your project with the right professionals, and a lien waiver prevents subcontractors and material suppliers from asking you for additional payment.
Never Pay in Full Upfront
As a general practice, contractors ask for a deposit. This initial payment prevents clients from backing out and leaving the contractor shouldering the initial costs, such as hiring a crew or ordering materials.
Scammers leverage this accepted standard and run away with the deposit. They will do a free estimate and make up problems that need "immediate attention." They use these fictitious problems to justify a higher material and labor cost and jack up the deposit amount.
Some criminals have the gall to ask for the entire payment before starting. New Jersey has laws prohibiting
home improvement contractors from demanding final payment.
What to Do If You've Been Scammed
Unfortunately, even with careful precautions, you might encounter a contractor scam. Here's what you can do if you believe you've been the victim of a scam:
- Stop Payment: If you paid the contractor with a check, contact your bank immediately and request a stop payment.
- Report the Scam: File a complaint with the New Jersey Division of Consumer Affairs. They can investigate your case and take appropriate action against the contractor. You can also report the scam to the Federal Trade Commission (FTC).
- Consider Legal Action: Depending on the amount of money lost, consulting with an attorney might be advisable. They can advise you on your legal options for recovering your funds or pursuing damages.
Conclusion
Researching your contractor is essential before committing to a project. Confirm their credentials and double-check any claims they make during the opening pitch. You should also contact the contractor's past clients and ask about their experience.
One of the best ways to scare off a con artist is to insist on having everything in writing. A detailed agreement holds them accountable for shady moves and limits their earnings until the work is completed.
Following these steps will protect you against contractor scams and ensure a smoother overall timeline. Protect your money, home, and peace of mind.
